2010 Upton Forum - Israel Kirzner

[Israel Kirzner] In the June and Edgar Martin Memorial Lecture titled “The Economics of Greed or the Economics of Purpose,” Professor Israel Kirzner addressed the common perception that greed is the driving force behind a market economy and an essential concept within the economics discipline. Kirzner argued that this common perception is flawed on both counts. While he accepts that within the market economy (as with any other economic system) some or even many people exhibit greedy, calculating, selfish, and materialistic behavior, he argues that greed is not the driving force behind market coordination, nor is it a requirement for widespread prosperity. Kirzner develops this argument by focusing on the entrepreneurial element in human action. It is the entrepreneur’s purposefulness that is the driving force behind the process of mutual discovery that markets foster, whether that purpose be selfish personal gain or entirely altruistic. In short, a society entirely populated with unselfish, other-regarding people, would still be a robust and prosperous market economy so long as entrepreneurial action was purposeful.

The full address will be available in the third Annual Proceedings of the Wealth and Well-Being of Nations.